I was introduced to the world of books by my father and nurtured by my English teacher, both kept me supplied with enough books big and small, modern and classics. Drowning in their fictional world, late night sojourns with super heroes and supernatural beings completed my days. Growing up surrounded by virtual friends, as I started working they transformed into management and self-help books in the quest to stay ahead in the rat race. Books were interspersed with other trade publications and in recent times by electronic newsletters.
At the turn of the century and thereafter there has been overabundance of management books on colored oceans, climbing mountains, being different and creating strategic differentiators; I remember meeting many luminary authors in conferences which had a mandatory fixture with one such thought leader. As a young professional I enjoyed these interactions and managed to get autographed versions of their publications. Reading voraciously my collection of knowledge started outgrowing the space in my office.
The story tellers and theorists with their postulations evoked interest in some; rest found good slumber value in the books distributed in the conference. Having read some of their books before meeting them I had a few questions; at times to validate my assumptions and many times to clarify a point or two. There were also occasions where my frame of reference did not agree with the writings resulting in good discussions over drinks. Those with good oratory skills enthralled us, for the rest their message was lost in articulation.
Everyone loves to go on company offsite meetings and sponsored conferences, especially to exotic locations with no agenda, devoid of presentations they have to attend or make. Most people love the fun elements, skits, karaoke, and when alcohol is involved. As a good manager, I too indulged my teams which required everyone to attend with only medical emergencies being accepted and excused. There was always excitement about the event and the agenda; there was also trepidation in equal measure with majority of the team members.
Talking to friends and peers I realized that my situation was unique and none of the others had found such behavior. We compared notes, went through respective agendas and offsites structures; there was no evident difference in what they did to what I did. We discussed locations, team profiles, traveling arrangements, accommodation, and day end activities; there was no material difference that could have pointed to my teams’ variant behavior. I sensed it was not the obvious so I popped the question to my team.
I did not know how to react to the revelation, to me it was unimaginable, but it was their reality. They loved everything that we did starting with preparation, planning, fun and games, what have you; the part they hated is when prior to the offsite a book was given to every team member to read which would be the theme of the outing. They were okay with the books being given post the offsite as giveaways as most of them did not read them, but when they were expected to read before the journey, it gave them sleepless nights.
I discovered that even my CIO friends wondered why I insisted that my team spend precious time in reading these “management” books. Do they serve a purpose beyond the hours being occupied? How does it help understand new technology trends or implement the next system? As it is, there is paucity of time, where do we fit it in our priorities and urgencies which keep everyone busy? Their ignorance was appalling and comparable to kids in my team. I also realized that the few who loved books stood out in their ability to engage their enterprises.
With information overload and explosion of news, views and innovative ideas, unfortunately many professionals have deprioritized reading as an investment over other pursuits. The resultant learning crisis is scary to say the least creating educated but ignorant people whose ability to connect across paradigms is challenged. The electronic media pushes information at our faces, we need to embrace it to survive. If you did not change with online retailing of books and then their electronic versions, it is time now before you are made irrelevant in the new digital world.
It was the first day at work for the CIO in his new company and he was excited about the prospects; the enterprise was one of the early adopters of technology and the business was growing faster than the market. The CIO having gone through multiple rounds of interviews and battery of psychological tests had made it. The first meeting was with one of the CEOs of a business; he arrived early and waited for the CEO. Arriving on time the CEO shook hands and sat opposite the CIO and opened the meeting with the remark, “I hate IT!”
Not knowing how to react, the CIO smiled and commented “Thank you, now that is a starting point.” The meeting went on for the allotted hour after with the CIO emerged with a list of things to fix, projects that the business CEO wanted to execute yesterday, meetings that he had to schedule over the next few weeks with other business leaders and he had yet to meet his team. Wondering about his decision, he walked across to the adjacent building where the next meeting was with his reporting boss and the Managing Director.
As he settled in he discovered the root cause of the bitterness with IT; there were many anecdotes and tales of his predecessor, his interactions with the business, his approach to any new solution and the way he managed the team. He (the predecessor) was the first CIO the company had hired when they needed to leverage the next wave of IT and moving from a local benchmark to being a global benchmark in the industry. Technically competent and extremely articulate, the ex-CIO had everyone eating out of his hands.
No one could have faulted the best of breed technology decisions, validated with more than adequate research from global consultants and industry reports. For his team and the business, he always had answers for any technical problem; his team supported him though they hated his micro-managing style of operation. The resultant rift continued to grow until one fine day the CIO fell into the chasm. Business leaders heaved a sigh of relief and hoped that the new CIO would put in better efforts to understand their viewpoints too.
The newbie met everyone across layers, from shop floor to Boardroom, warehouse to suppliers; he worked with the feet on the ground understanding their pain, met customers gaining insights on drivers of top line. Expectations were set with the teams on key deliverables and measurements with checkpoints on what to report and when. Meeting with key vendors determined traction and connect that he could leverage to move into the next gear. The biggest change was in the attitude of his team and how they approached the business.
Soon he was part of the business teams networking with executive assistants and chiefs with equal ease getting around with a conviction that people accepted at face value. His team liked the empowerment and the freedom; they knew help was at hand whenever they needed it, so was a good word and encouragement. They worked in sync and turned around some of the faltering projects excited by the prospects of growth, visibility and glory; perceptions of IT started its uphill journey towards collective credibility.
The team that was written off by the business shed their reserve coming out into the open with new found confidence built on the foundation of success and the strong shoulders of their leader. They saw a change in behaviour from their customers and reciprocated fuelling the fire of performance taking it to new heights. Internal and external appreciation poured in acknowledging the return to leadership position in an industry. The turnaround was complete, the new CIO had once again been able to bring the function back to relevance.
It was an industry conference on a global stage where the CEO was presenting on the business success and differentiation with help from IT. There was applause in the room after the keynote was delivered; the CEO bowed as his colleague the CIO joined him on stage. As they got off stage they were hounded to discover the secret sauce of the CEO-CIO relationship. The CEO said, “I hated IT a few years back until this guy came on board and changed everything. Today IT contributes to our growth and I love IT.” Both grinned cheerfully and with hands on other’s shoulders walked away.
Footnote: When I wrote about “Living with Bad Hires” many readers wanted to know what happened after the CIO was fired. This is the story of what happened.
“This is crazy but I am loving it,” so said a CIO who had taken on the mantle to transform the way his company uses IT. He had been in the role for a while and his company was one of the market leaders in their chosen industry; they needed a strong dose of really good medicine to shape up the information foundation. Business welcomed him with open arms, he showed them what was possible, he brought all of them together to the common cause; the company began the journey with multiple projects starting in parallel.
The roadmap drawn and agreed upon, the company created a healthy pipeline of initiatives that would leapfrog the reputation of the company and the CIO. His team rallied around him as they saw a future with promise of good days to come. They believed in the vision and toiled sweat and tears to shed the inertia that was the hallmark of the company. Projects rolled and went live building credibility and adding fuel to the fire of desire; the going was good and everyone loved the orchestration that created music they had not heard before.
Another CIO on the table retaliated with her wisdom of focusing on one project at a time and doing it very well with no window for error. She was a veteran herself though not the visible types but staying in the shadows of quiet achievement. Her journey was of incremental innovation staying close to business and efficiently focusing on getting it right eventually made her slow and dependable. Growing with time in familiar territory her rise was a story of “I will do what the business wants even if it is irrational and requires maintaining status quo.”
Working with a monopolistic market leader, there was no real pressure for majority of her career, the global enterprise driving strategy and direction while controlling local innovation in areas that mattered. The rest was about creating solutions that worked to digitize existing manual processes. She had toiled diligently and grew through the ranks doing a fair job of maintaining status quo. By virtue of the years in the company her understanding of the business was good and she had built empathy which helped her.
The two were a study in contrast in their approach to partnering with business and how they created value for their respective enterprises. It was a function of market dynamics as well as individual desire and capability to be a transformational leader. One demonstrated passion and a sense of urgency while the other was happy to be an order taker and wait for something to happen. The group of CIOs present took sides with many inclined towards aggression though most professed that a middle path is the best approach to staying relevant to the business.
A few years later many of us happened to meet again; reminiscences of the last discussion offered an opportunity to check how both had done. The transformation aspirant had slowed down a bit though he was still miles ahead of the conventional pace of implementing technology solutions. He had more or less delivered to promise with the organization struggling to keep pace with the fast track path they had chosen. He was satisfied with the change he had architected and the fact that his company was a much sought after customer by many IT companies.
The lady was struggling for survival, her company having been acquired, new set of expectations, new pace of change, new set of deliverables, all of which were alien to her. Her incremental approach was seen an unaligned to new business speed and the urgency to expand market share and dominance leveraging technology. She was unable to step up having lived a life of a passive though reasonably effective partner to the business. Having worked for one company all her life, she was clutching straws to save herself.
Our collective wisdom could only recommend that she seek alternative pastures before she becomes irrelevant to the company. Her shallow experience did not give her too many choices which she realized. Someone suggested to the aggressive CIO that he hire her to run the operations and business as usual which she was good at. Today most CIOs do take on multiple projects which is the need of the hour to stay relevant; it is a rare luxury to not do so and fraught with danger for the long-term. BAU does not require expensive resources.
Where are you in the continuum?
I was at this social gathering organized by one of the top global consulting companies for their current and potential customers. It had attendance from veteran industry leaders, founders of companies, CEOs and CFOs, sprinkled with a few Venture Capital heads and off-course partners from the sponsoring consulting company. I was the odd man out from IT representing my company; talking to a few known people in the room, introductions were made with some as the discussion veered from world economy to the best wine.
The Black Suits represented a diverse set of industries and functional experience easily mingling with each group and adding to the conversation. Enviously networking at its best, you could pick tips from these suave individuals on how to ease into a discussion and slide off without being rude. Their demeanor would teach many CIOs and CEOs how to conduct themselves in a senior gathering that expects you to merge in without getting technical or talking about IT barring a passing reference to the function you manage.
One of the cases under discussion revolved around a complex merger for a diversified group which was facilitated by the hosts. Everyone applauded the ease with which the deal was consummated, financially and culturally; a Partners remarked about a similar deal gone sour done by competition, stressing on the fact that quality matters when it comes to consulting and a little extra investment is worth the outcome. The wise men nodded and moved on to discuss multiple experiences and anecdotes around consulting that regaled the small gathering.
The comfort of the group with each other and the willingness to share and seek help from various quarters was a bit discomforting; these were industry captains that everyone looked up to. They controlled a large portion of the economy and influenced many strategic directions or shaped policy. They acknowledged the fact that every niche and skill has an expert or master who can do it better, faster, and consistently with successful outcomes. They sought these experts from the outside when they needed them.
That weekend mulling over the few hours spent, the big realization dawned upon me was the difference in the approach to solving problems taken by CIOs. Almost all CIOs believe that they are self-sufficient in their knowledge and skill to solve every problem that needs to be solved or opportunity to be explored using technology. They reach out to vendors and solution providers to discuss options; few subscribe to reports from IT research companies and engage their consultants to assist them. They hire consultants only when pushed by their boss.
Here’s a typical dialogue that happens with CIOs:
- Do you need help with IT strategy or want to validate it? That’s why I was hired!
- Is there a business problem you want us to solve? I know enough about the business to do that
- Need help with any of your sticky projects where you’re struggling ? Everything is under control!
- Are there any skills you need to augment in your team? I will send my team for training!
It is not just the fact that CIOs are averse to seeking help from consulting companies, they even shun away individual consultants typically retired or out-of-work/in-transition CIOs. They are perceived as threats to their credibility and expertise. Why do you need to hire anyone to help you? Not sure how many actually had the courage to go and ask their respective boss to seek external help. This is despite the fact that the enterprise may have a history of engaging consultants for various business activities, strategic or operational.
The strong individual is the one who asks for help when he needs it, said a wise old lady; how true it is in the current context of our work lives with the level of disruptions increasing day by day, expectations rising and uncertainty being the only certainty. Discussing the situation with many of peers I heard the same story again and again; no one wants to be seen as deficient in any skill or capability. All CIOs want to be superheroes, know it all and on top of every situation thereby digging holes for themselves to fall into all along.
In this case I hope CIOs will learn from their peer CXOs, it will help them be more successful.
Part 1 was published last week; this is the second and final part of the story.
So, oft in theologic wars
The disputants, I ween,
Rail on in utter ignorance
Of what each other mean,
And prate about an Elephant
Not one of them has seen!
The CIO struggling with disparate views of the team who were unable to visualise the big picture and decided to leave it that way with his team providing the glue that held all of it together; he felt the effort of getting everyone to the same page will inordinately delay the project. So he chugged along for another few months keeping watch on the big picture; progress was slow but nonetheless there. Soon time came to put together all the pieces, get the system tested not just technically but functionally before the training and go-live.
This was one of the critical projects for the enterprise and the CIO; it was important and necessary for everyone involved that the project succeeds. The business teams who had always lived on an island looked from their window and kept trying to refine their view of the picture; it never crossed their mind that there were interdependencies which impacted the whole when they fiddled with their parts. The Project Manager kept reminding them of the uncomfortable truth which they kept denying putting an ostrich to shame.
Escalations to respective business and function heads brought everyone to the table looking worried and making the right noises. Admonishments distributed around liberally and pulling up done was deemed adequate response to the crevice that was getting bigger by the day. Not convinced that this was going to work, working with the CEO, the CIO decided to use some creative analogy to explain to the group why they need to acknowledge the elephant in the room and look at the unified view before the beast tramples all of them.
The CIO asked each functional lead to present their process maps and changes sought to the system; he put all of them through the paces noting down points that were discordant with overall progress. As a clear picture emerged through the noting the real challenge was as visible to everyone as the elephant in the room which no one could any longer feign ignorance about. Acknowledgement of the creature was a starting point towards redemption and everyone looked up to the CIO for the proverbial silver bullet.
He highlighted the fact that everyone had agreed to the commercial-off-the-shelf-solution (COTS) as the right choice before the project began; everyone also acknowledged that the solution has best practices that are used by many peers and competitors globally. The team had willingly agreed to adopt the new normal and reality to improve their operational efficiency. Some of those team members were no longer in the implementation team but representation of the organization process cannot be person or location specific.
The CIO went on to demonstrate how individual views were being projected as departmental views to the detriment of the project. Ignorance arising out of lack of experience or alternative perspectives manifested in the dialogue that the users had with the development and implementation team; their unwillingness to look at possibilities was driving the change averse behavior. They were good people who were proficient in what they did; they had invested their lives in maintaining status quo as it worked for them.
The CEO recognized the malaise and applauded the fact that the CIO had escalated the issue which has plagued many other non-IT projects too. No one talked about it openly and it had almost become part of the culture of the enterprise. She faced the nervous group which had difficulty in accepting that now they can no longer live with their view of the elephant; the whole had been uncovered, it was discomforting. Some of the team leaders were enthused, the rest mortally scared with no real choices but to change.
She promised to stay on top of the situation and asked for all progress reports to be marked to her and attend all review meetings; she expressed her disappointment at the progress and timelines and asked the CIO to recast them with a stretch achievable target which he readily did. The teams accepted the eventuality and assured the CEO that they will collectively own and deliver the project. Many moons later the CIO was in the news for a successful deployment of a complex solution, a first in many ways in his chosen industry.
Do you have an elephant in your backyard?
It was six men of Indostan,
To learning much inclined,
Who went to see the Elephant,
(Though all of them were blind),
That each by observation,
Might satisfy his mind.
So goes an old parable from a few centuries back which has many even older variations across countries with their cultural nuances thrown in. While the object of curiosity does not change, the number of people in the group does and so do their inferences. Conclusions derived too have varied by context of the narrator and the reader or listener though they all end up pointing to one key aspect of human behavior, i.e. people jumping to conclusions based on their frame of reference and global ignorance.
Corporate world experiences elephants in the room, often leading to embarrassing and hilarious situations for those involved including instances where the elephant was never discovered. My friends have narrated many instances of the sum of parts being larger than the whole; differing frames of reference like the blind men in the fable have frustrated much intent to progress with incessant harping on their version of truth. Then off course there is the wise owl consultant who ends up painting a different animal farm.
The project was critical to the company impacting every function directly or indirectly. There weren’t any alternatives which is why it was a project that everyone agreed to unanimously. The CIO was happy that there was consistent alignment and endorsement of the project with hardly any resource constraints. Mood in the air was exuberant and success was perceived inevitable; everyone involved agreed that it could not have been done better with the transparency in decision making and setting expectations.
Few months into the project the CIO met with his peers to get feedback and inquire if he was missing anything real or perceived. Everyone had a fair view and appreciation for the flawless execution that had followed the project kick-off. Satisfied with the responses he forged ahead full steam; completing one phase and while moving to the next he hit some rough weather. With choppy seas and a pronounced roll, he again went back to the CXOs to check if course correction was required. What he discovered…
First stop Finance, he queried the CFO; everything is fine, it is a great financial accounting tool but… the indirect taxation model is not suitable and we would like to retain the old solution. Head of Supply Chain quipped that Sales & Distribution were good to go but… the planning part was not good enough and he would like to build a custom solution to meet the need. Manufacturing felt that their needs would be met at the basic level however… it did not address the stores and repairs current processes which would require additional solutions.
Marketing was non-committal in their response, master data needs to be fixed by someone before we can comment. Fortunately the Purchase team took to it like fish to water; they loved the solution which they believed will give them wings. Human Resources did not believe that they needed to change whatever they were doing; they were averse to change and closed. Fearing the worst he spoke to the IT team only to realize that the team was toiling away to keep everyone together moving in the same direction.
The disjointed and independent frames of reference portrayed a different view and plane; connecting the dots provided a picture that was far removed from reality. Everyone took a view based on what they saw and how it impacted them; there was no effort to stitch together a bigger or holistic picture. The original dream and expectation appeared a faint memory. Their views reflected a myopic vision in their risk-averse mindset and no one felt like challenging it. I know how to manage my part of the elephant.
The CIO realized the elephantine proportion of the problem where everyone in the functional teams saw a part of the animal they were exposed to and made preparations based on their conclusions. The IT team was left holding the portrait that the solution was expected to be. He contemplated different options and finally decided to leave the incomplete picture as is; he believed that he knew the elephant and how to tame it. After all this was not the first time he was in this situation.
And so these men of Indostan,
Disputed loud and long,
Each in his own opinion,
Exceeding stiff and strong,
Though each was partly in the right,
And all were in the wrong!
Was this the best option for the CIO? What would you do? To be continued…
They traveled the seven seas in a small group looking wide and far for the ultimate solution to beat all solutions and their competitors. Visiting software solution providers and their customers, the team ensured that they explored all the nuances of the solution as used by their hosts. It was a search spread over many months and millions of frequent flyer miles. They came back with voluminous notes which were put together to create the decision matrix. A winner emerged from the chaos; it was the current market leader.
The team was excited with the prospects of implementing the world’s best solution; they presented their conclusions to the management using business case formulated on vendor provided parameters and some internal thinking. Despite the high investment required, management accepted the widely used solution considering that alternatives were not even known by name. The system integrator and implementation partner who had worked through the journey celebrated the decision along with the team.
The team chosen from business, IT and the vendor made preparations and started the project as a cohesive group with broadly defined timelines. It was perceived to be easy with clear use cases and the fact that current manual process was riddled with inefficiency. Lagging competitors by many years, the team and everyone around acknowledged the need and urgency. Well begun is half done, so goes an old English saying; that applied quite appropriately to this marquee project which had all the ingredients that consultants and wise men talk about.
Months passed by in the requirement gathering phases and everything was hunky dory; the rigor of the business team was highly appreciated. Some more months passed by, the team was still in discussion on feature fit to the future state process. Exceptions were highlighted and the system expected to cater to these. The implementation partner was getting restless. Another couple of months later there were no conclusions on the final process; the IT team raised a red flag to the CIO, users reciprocated with an escalation to the functional head.
A senior functional resource was brought in to resolve the bottlenecks; he quickly realized that the users were attempting to force fit their existing processes into the new system. The group had challenges in understanding the basics features of the system despite multiple rounds of demonstrations and step by step explanations. Their lacked the ability to define new optimized processes and with no interest in changing the process they kept shifting the goalpost. Soon it was evident chances of success were like water on Mars.
The SME decided to unearth documents that were the foundation of the product selection. The going in comparison set was not a portrayal of the future state but a broad level definition of the function which obviously met every systems checklist. The selection was based on market positioning and market share in their industry. Almost everyone was using it and thus the decision was kind of obvious. It did not need the process that was adopted to determine the tools. The lack of focus on process from the beginning led to the current situation.
What comes first, process or technology? Should an organization determine the future state before attempting to select a tool or follow the process that this company did of finding the best tool and then try to figure out how to make it work? If technology is indeed subservient to business and process, then the journey traversed by the team had a fallacy; even when choices are limited as was the case again, should the process take precedence over technology? The savior understood the problem and solved it quickly to get the project back on track.
The Knight in shining armor took some difficult decisions and changed some resources while staying involved with the rest focusing on what mattered. He separated the critical and the important while parking the good and nice to have. Exceptions will be addressed when they occur, let’s move on with the 99%. Suddenly everything started moving and though delayed they were back on track. Given the situation I believe that it does not matter which comes first in the poultry farm; it is about where you want to go.
The organization acknowledged the fact, “People are not your best assets, the right people are!” and that’s a story for another time.
With the advent of the Internet two decades back euphoria around internet based business models exploded upon all of us. Predictions like “if you are not on the web, you will be dead or if you don’t have an internet strategy, you don’t have a business strategy” shook up everyone and pushed them towards limits of paranoia. Untenable valuations on shaky business models led to the dot bust that wiped out millions from budgets and zillions in market capitalization. Now digital is rivaling the din of the past and it has everyone scrambling again.
Some CIOs saw it coming earlier than others; creating awareness within their enterprises, they attempted to raise the bar. Initial reactions of cynicism and indifference led many CIOs to return to their comfort zones while the world around them flirted with the digital wave. As success stories started trickling in, it gave jitters to the disbelievers and created a flurry of disconnected activity. Every CXO wanted a digital project; everyone added the word “digital” in the headline; many ignored the CIO to avoid embarrassing discussions.
SMAC came the response from consultants, vendors and the IT folks alike; to get started on your digital journey, you need the skills, talent and a link back to the physical world that IT provides. Many CIOs reveled in the limelight of having been ahead of the game while the rest joined the confused ranks adding to the chaos with technology play. As individual pieces of Social, Mobility, Analytics and Cloud made way into various initiatives, the picture started to become clear that digital is not an option anymore; it is going to be a way of life.
Board room and management discussions on digital attempted to create correlations with revenue growth, customer service, enablement of suppliers and business partners, automation for improved process efficiency. Now the connections to enterprise goals are shifting the discussion from the likes of Big Data Analytics or Mobility to creating new business models or tapping new profit pools and outpacing competition. Everyone wants to be anointed with title of the CDO to be hailed as the hero when success arrives.
Competition from new age companies in some sectors like hospitality, retail, virtual collaboration, and travel and entertainment has disrupted conventional age old business models leading to a scramble to catch up. Industrial giants slowed by corporate inertia are waking up to new threat and opportunities. Willing to use their scale, muscle power and enormous resources, they potentially have the ability to devour the small fish while they establish new business models and reinvent their business, systems and leverage the digital wave.
Silos of digital initiatives will at best test a hypothesis, for enterprise wide impact, cohesive and integrated approach with CEO alignment is essential. Reality is, IT and business strategies are no longer separate, and they have become inseparable. With everything going online and “Internet of Things” creating an avalanche of hitherto unexplored data, enterprises are pushing the boundaries of analytical possibilities. Corporate and information boundaries are disappearing demanding democratization of analytics and decision making.
The oft repeated question to CIOs raises its head again on their position in this evolutionary revolution? IT teams need to focus on not just scale but also the new application ecosystem that requires IT teams to discard legacy and pursuit of monolithic systems and shift focus on agile built for purpose apps. This paradigm shift requires preparation for non-stop business in the interconnected world. Customers are challenging the business of incremental innovation and forcing companies to listen and co-create new products and services.
Digital is here and how! For most CIOs BYOD/T was a beginning, BYOW (Wearable) will stretch the already delicate ecosystem. Finicky customers expecting instant gratification threaten fragile brand reputations with 140 characters and less. Consumption patterns are shifting thereby forcing CIOs to rework corporate peer relationships. I believe that CIOs can reclaim lost ground by challenging existing digital alignments and build the foundation that will help the enterprise win in raging battle for revenue, profitability and the customer.
Your enterprise digital stance may be a challenge at the moment; culturally maybe the company does not enable open ideas or visible risk; it is up to you to decide whether you want to be a bystander while the world moves ahead or you want your destiny to be linked to the new world of digital enablement? Are you ready?
That was a big debate as debates go though not as big and passionate as the Business IT alignment or for that matter on the changing role of the CIO or the shortest trigger which is the CIO reporting to the CFO. Conflicting and alternative views were aired by those present; by the time the group broke up there was no consensus and everyone agreed to disagree in defining or classifying a “best practice”. The innocuous subject of discussion was how should the IT team and/or the CIO select a package or solutions vendor!
For business as usual application support, break-fix maintenance services, system or database administration, network management, data center and then the servers, storage or network devices, vendors are largely selected and managed by the IT team. In many cases the CIO is happy to let go and have his/her team manage these relationships, service levels and depending on the governance model, the negotiations. These all comprise operational IT which is essential to run the business and is only noticed when something breaks.
Enterprise projects or new initiatives represent a different set of dynamics; the heads of function(s) impacted their CXOs and their operating staff which will feel the change, most of them have a view on the right or the best or the cheapest solution. Industry benchmarks based on global industry and local market view and competitor information provide a starting point. Then there are favorites based on past experience or use in previous company that skews the selection process depending on the seniority of the person pushing it.
Most initiatives start with an internal discussion with internal stakeholders on solving a business problem or tapping an opportunity which culminate into documented requirements and outcomes. This is when business likes to handover the reigns to IT to find the most appropriate solution, negotiate, implement and deliver the outcomes. Technology CIOs love this though this hands-off approach “I know the business and you know the technology” has had its share of challenges with iterative development and delayed timelines.
The more formal process expects a Project Initiation Document or some kind of document prepared by Business and IT, which is then circulated and signed off to formally start the search. RFIs and RFPs follow resulting in colossal volumes of paper which no one reads; subjective and objective scoring of responses create a vendor shortlist who are invited to present to the group that sees diminishing participation over time. Final set of vendors are grilled and the winner is announced; such a process requires high level of maturity to sustain itself.
Research companies and third party assistance for independent assessment based on formally defined parameters was touted as the way to drive a decision transparently. This was accepted as the best and irrefutable methodology in the past though not too many had used it due to the cost of conducting such an exercise and the discovery of secret alliances such companies had created with vendors. Then a junior CIO murmured about a research company changing the parameters to put forward a vendor based on his boss’ choice and directive.
The view of many in the group was that users don’t know enough about the landscape and choices available; they should stick to defining the problem or articulating the opportunity; partake in the requirement gathering and participate in the testing, training and deployment. The counterview expected business collaboration through the project with equal ownership from concept to execution. Both camps spoke of their experiences – successes and challenges – which were in ample quantity to pick from.
As I see it there is no right or wrong way to select a vendor; in many cases the choices are not really choices with dominant vendor position for the process, function or industry. IT maturity, governance and credibility play a strong role in whether a unilateral or collaborative approach is best. Internal strife if any is best managed within; in either case, it is critical to not lose focus of the expected outcomes and project a unified view to potential vendors and partners. For CIOs to stay relevant as business partners they need to be adaptable.
It is our attitude at the beginning of a difficult task which, more than anything else, will affect successful outcome!
Over the years economic cycles have turned all conventional wisdom upside down; the new normal that became reality before the turn of the decade squeezed all the unnecessary costs out of every line item in IT budgets. Do more with less being the mantra, CIOs scrutinized operations and optimized them ruthlessly. Half a decade later and half way through the year, one of the resurgent themes with many CIOs is conservation of funds; revenue growth has been under pressure for some time, bringing costs back into focus.
In an informal gathering of CIOs this was the predominant theme with everyone attempting to figure out where do they get additional savings from ! Hardware refresh had eliminated maintenance costs for a few years, but now maintenance and support contracts are up for discussion for all the critical and non-critical hardware. Users now expect desk side support for all types of incidents and problems; with rising manpower costs, hardware service vendors and maintenance providers are demanding inflation linked increases.
Last time around there was a flurry of activity around license management; are people really using their allotted licenses? Thus software license costs were pruned down to the bare minimum required; number of users has gone up now and there is a need to buy additional licenses. Vendors pushed usage audits and attempted to enforce compliance to license agreements putting the CIO in a precarious situation; no one wanted to be non-compliant. Open source again became a discussion with limited success for some.
Back then again contracts for running legacy and custom applications, and maintaining business as usual were trimmed; wherever possible the activity moved to internal resources. Onsite activities were offshored to the service provider’s premises; back office functions relegated to low cost locations in the suburbs. Contracts were examined afresh and brought down to a bare minimum. A few also took the tough step of letting some of their team mates go and reallocated portfolios stretching the remaining team. FUD ruled for a while.
So where do we look for new savings opportunities? How much more can we do with less lamented the group? The group had no bright ideas, nor any best practices to share. One of the CIOs present gathered sympathy for a 25% cut imposed on her capital investments as well as operating expenses and still expected to run projects as well as keep the lights on with no adverse business impact. Someone suggested that she conduct an open dialogue with her boss and ask him for ideas on how to implement the cut.
Systematically the group explored some of the options that vendors pitch in as cost savings measures. Is the Cloud with pay-per-use models a viable option ? Variability has been one of the promises from the cloud; but then the proponents of this model cautioned against if cost savings was the primary objective. If you moved existing loads to the Cloud, what would you do with the existing hardware? It would anyway make sense only if there was a need to increase compute capacity or hardware refresh was imminent.
Can and should total or strategic outsourcing be explored? That is when most vendors promise 20+ percent savings and projections are locked down for a number of years! Transfer the accountability and let the vendor figure out how. A couple of CIOs who had been there done that cautioned against it. They have had a harrowing time making some of the numbers in the spreadsheets stick in real life. Legal teams poured over contracts to find a way to make it stick; the CIOs ended up in getting the stick instead.
Most organizations which are driven by ratios and numbers resort to cost cutting rather than cost management in their attempt to keep the street happy. They want to look better than their competitors and keep the stock price high sometimes even at the price of damaging the DNA of the company. Consultants get hired to find hidden costs while they get paid visible money with diminishing returns. I believe that enterprises driven by customers don’t resort to cycles of cost containment and thrive in adversity.
A lone voice in the room asked, “Can we look at increasing revenue instead?”